Non-employer businesses have been a big part of American business for many a decade. And even with the employee-rich startup culture in boom, non-employer businesses are still on the rise.
So is this something you should be looking into in your own business pursuits? It’s important that you understand a little more about how this part of American business operates. Take a look at these facts. They’ll help you get a sense of the bigger picture when it comes to this type of business.
What’s a non-employer business?
A non-employer business is actually something most of us is familiar with. It’s just that we don’t often use that term to describe the business. Basically, the owner of the business in question doesn’t employ anyone except themselves. They’re self-employed and are going at this pursuit solo. Some may say that a more accurate term would be a non-employee business. But the business owner doesn’t employ anyone, so the non-employer term definitely makes sense.
Non-employer businesses are hardly a minority of businesses, believe it or not. When you think about it, this makes a certain kind of sense. After all, it is markedly easier to start one of these businesses than it is to get something going with employees. If you count up all the businesses in America, then you’re going to find that most businesses are non-employer businesses. The United States Census Bureau found that non-employer businesses made up the majority of all businesses in America. In 2013 it was estimated that for every thousand residents in the country, there were 72 non-employer businesses owners.
However, the same study also shows that these businesses only make up a very small portion of the country’s overall business revenue. After all, most of these businesses are likely to be the part-time pursuits of self-employed people. They may even have another full-time job for a regular business. It’s estimated that just under 4% of America’s business revenue generates from non-employer businesses.
If you’re interested…
Non-employer businesses can work really well for people interested in going into business solo. As long as you’re not expecting to run some crazily complex operation, not having employees to look after can work to your benefit. And there are certainly plenty of resources available to you if you need help. The IRA will be able to talk to you about certain tax breaks you’d be eligible for. Companies like Office Evolution can offer you office solutions suited to your business model. The SBA will also have resources for businesses that don’t require employees.
The costs saved by going at a business in this fashion are really remarkable. The average capital expenditure of a small business with ten or so employees exceeds $150,000. Many non–employer businesses will only spend between $3,000 and $5,000. However, it’s important to remember where a lot of those extra costs go. They go towards employees who, presumably, end up bringing in more in revenue. So you have to be sure that your business can make the profits you need without hiring the help of part- or full-time employees.